CMS - Be warned

[etext]

A simple scenario.

You open a trade, let's say to sell cable. You have a 35 pip stop loss in the deal, and for 2 hours it doesn't do much. It dribbles up and down 10 - 15 pips in loss and then back again down to a few pips in profit.

We then enter into a report time and the price drops down quite dramatically 20 pips and then continues to drop another 5 pips and then another 3 or 4. You a re 28 or so pips in profit - time to drop your stop loss down to your opening price to lock in profits or at least ensure that you don't make a loss.

You CANNOT do this on Capital Market Services (CMS) You get an error message which Says "price not valid".

This has hurt me on more than one occasion so I have just rung them to discuss the matter with one of their representatives.

They have a policy which comes into operation at volatile times of the market where you cannot place a stop or a limit within 35 pips of the current price.

In total - 35 pips either way, this means that they are covering a range of a full 70 pips where you cannot place a stop or a limit.

A nightmare scenario!!!!!!

I am looking at Oanda as a trading alternative. Can anybody tell me if they have a similar policy in place?

Cheers

Keith Mason

 

[Rudy]

I trade with Oanda since April this year. I can move my limits and stops up to 1 pip from the current bid / ask price also when economic data is being published.

The only thing that happens is that the spread increases from the standard 1.8 pips (for EUR/USD) to 3, 4 or 5 pips temporarily when large price swings are expected.

 

[etext]

Thanks Rudy,

I have downloaded their trial version so I will give it a go.

I can live with a spread increase at times of volatility - that is to be expected, but not a total of a 70 pip no deal spread.

Cheers

Keith

 

[Hayek]

Thanks Rudy,

I have downloaded their trial version so I will give it a go.

I can live with a spread increase at times of volatility - that is to be expected, but not a total of a 70 pip no deal spread.

Cheers

Keith

I don't like CMS too. As to Oanda, check its slippage instances in major forums like MoneyTec or EliteTrader. Good luck.

 

[JumpOff]

I've used the simulators from CMS and oanda, and have to say I prefer oanda. The charting is better on CMS, but there simulator servers become "unavailable" during times when the market is moving. Oanda normally has a tighter spread (1.8 on eur/usd), but this afternoon it widened to 10 pips - with no discernable reason that I could see.

Keep in mind that none of the retail forex shops are regulated in the same way that stocks and futures brokers are.
JO

 

[JTrader]

Originally posted by Rudy -
I trade with Oanda since April this year. I can move my limits and stops up to 1 pip from the current bid / ask price also when economic data is being published.

The only thing that happens is that the spread increases from the standard 1.8 pips (for EUR/USD) to 3, 4 or 5 pips temporarily when large price swings are expected.

A standard spread on EUR/USD of 1.8 pips? This sounds good/promising

Is this Oanda service a retail forex service just like FXCM, CMS, GFT and ACM etc? or does it involve trading through an ECN llike with www.hotspotfx.com or www.espeed.com?

I am accustomed to a 3 pip spread on EUR/USD with the retail forex brokers such as FXCM, CMS etc. How does this Oanda service work? Is the spread fixed at 1.8 pips or does it fluctuate? If it fluctuates, what does it fluctuate between and when does it fluctuate?


Many thanks

jtrader.

 

[JP1966]

ODL and IG both give me 2 pip spreads.

 

[JTrader]

Hi jp1966

would you care to elaborate on the service provided by ODL (is that their real name?) and IG?

Are these 2 companies retail spot forex brokers? or does it involve trading through an ECN llike with www.hotspotfx.com or www.espeed.com?

What pairs do you get 2 pip spreads on?

Are spreads always 2 pips on these pairs or can they be higher at times?

Any info welcomed

Many thanks

jtrader.

 

[Faris]

Hi jp1966

would you care to elaborate on the service provided by ODL (is that their real name?) and IG?

Are these 2 companies retail spot forex brokers? or does it involve trading through an ECN llike with www.hotspotfx.com or www.espeed.com?

What pairs do you get 2 pip spreads on?

Are spreads always 2 pips on these pairs or can they be higher at times?

Any info welcomed

Many thanks

jtrader.

Hi Jtrader.

Do you have any experience with using Espeed. I think someone on this board mentioned to trade through them you would need to deposit around $100K. I can't see any mention of commission rates on there site.

This is ODL's website http://www.odlsecurities.com/products/forex.htm#return

Faris

 

[Faris]

http://www.igmarkets.com/

 

[JTrader]

espeed

Hi Faris - this is the info I learned about espeed. It is on this thread - http://www.trade2win.com/boards/showthread.php?t=10544&page=3&highlight=espeed

Originally posted by jtrader on 15-09-2004, 12:03 PM

I also spoke to espeed th other day.

It seems that this service is aimed more towards institutional clients who have big pots of money to play with. The minimum order size is 1 million.

It seems similar to hotspotfx and Ideal Pro in that espeed act as a broker and do not make their own market. Commissions are $40-60 per round trip on a 1 million position. EUR/USD spreads are 1-3 pips (typically 2 pips).

With hotspotfx minimum order size is 100,000. I read that hotspotfx do not allow you to cancel orders which are within 10 pips of the market price, espeed allow you to cancel orders within any range of the current market spread.

It sounds like a good platform. I am not sure if it involves trading through an ECN as does hotspot fx, perhaps someone else knows? Also, do you know if Ideal Pro is traded through one of these "ECN" thingy my jigs?

Unfortunately, espeed isn't suitable for me, because within my current (5 year) trading plan, a 1 million position would be the absolute upper limit of my stake sizes - but, never say never!

Cheers

jtrader.

 

[Rudy]

Hayek,
I have rread these slippage discussions also. I must say that I have also occasionally experienced it, but it happened only during spikes with no ticks in between. Hey, what can you expect in such case?

I also know about the discussions of other services offering "guaranteed stops". But lately I hear different stories. They no longer seem to offer this guarantee anymore during high volatility (at the publishing economic news). And during the rest of the time I do not seem to need that guarantee: all my linits and stops at Oanda were correctly honoured so far.

 

[Rudy]

Jtrader,
I do not exactly know what you mean by a "Retail Trader" versus an "ECN" (lack of knowledge I admit).

I do know that Oanda offers real time instant tradeable prices. And I constantly have another data stream open (my analysis sytem that I prefer since Oanda offers only limited grahping tools) that shows the same prices or max 1 pip difference, so their prices seem to be oke.

Another plus is that you can trade any amount, even only 1 $ if you like.

(I do not get payed for all this advertizement. I simply am satisfied with their service (so far...).)

 

[JTrader]

Thanks Rudy.

A retail forex broker "makes their own market" in spot forex. They profit when the customer loses. Examples are CMC, CMS, ACM, FXCM, GFT etc.

The other typre of interbank forex broker allows the customer to trade/place orders directly on the interbank market - often via an ECN platform. This type of broker usually charge a commission. They make their profit in the commission and do not gain anything when the customer loses money. There is no conflict of interest.

What pairs do you get 2 pip spreads on?

Are spreads always 2 pips on these pairs at all times with these brokers, or can they be higher at times?

Any info welcomed

Many thanks

jtrader.

 

[JTrader]

2 pip spreads on majors

Hi

does is anone aware of any brokers that offer a 2 pip spread on major pairs?

I know that some direct access ECN type brokers such as hotspotfx and espeed offer a spread that is less than 3.

It seems that http://www.odlsecurities.com and http://www.igmarkets.com may offer 2 pip spreads on major pairs. Are these companies retail spot forex brokers?

Are there any other retail forex brokers that offer a 2 pip spread?


Many thanks

jtrader.

 

[Hayek]

Hi

does is anone aware of any brokers that offer a 2 pip spread on major pairs?

I know that some direct access ECN type brokers such as hotspotfx and espeed offer a spread that is less than 3.

It seems that http://www.odlsecurities.com and http://www.igmarkets.com may offer 2 pip spreads on major pairs. Are these companies retail spot forex brokers?

Are there any other retail forex brokers that offer a 2 pip spread?


Many thanks

jtrader.

I had supposed Hotspot Fx had no interest conflict with its clients for it is an ECN. But after read its 'Risk Disclosure' and 'Trading Policy', I felt confused.

Risk Disclosure:
Hotspot FX as Principal. Hotspot FX acts as the counterparty to all foreign currency contracts executed through the Hotspot FX System. Hotspot FX is not required to continue to make markets in foreign currency and may refuse to accept any order for any or no reason, including but not limited to the failure of a customer to have sufficient funds on deposit with Hotspot to margin the position, market volatility and illiquidity in the related interbank foreign currency market. In particular, during periods of market volatility, it may be difficult or impossible to liquidate an existing position, to assess the value of open positions, to determine a fair price or to assess the exposure to risk. For these reasons, transactions in foreign currency involve increased risks.

Trading Policy:
10. Hotspot FX as Principal. (a) Customer acknowledges that all contracts executed under this Agreement shall be made and entered into with Hotspot FX as principal. Customer further acknowledges Hotspot FX’s right, in its discretion, to limit the number of open positions that Customer may hold or acquire through Hotspot FX. (b) For the purpose of hedging or otherwise managing the risks associated with the foreign currency contracts Hotspot FX enters into with Customer or other customers, Hotspot FX may buy or sell foreign currency contracts for its own account. Such contracts may be executed at a different price from that quoted to Customer. Hotspot FX is under no obligation to disclose such price to the Customer at any time.

12. GENERAL DISCLOSURES. Hotspot FX and/or its affiliated organizations may make markets in Foreign Currencies (during periods of reduced liquidity) and may act as the principal counterparty in Foreign Currency transactions for Hotspot FX Customer Accounts. While such an arrangement may give Hotspot FX many distinct advantages in servicing its Customers in O.T.C. Foreign Currencies, the Customer should remain aware that the O.T.C. Foreign Currency market is unregulated, and that Hotspot FX may at times be working to fill several Customer Orders at similar Spot Rate levels simultaneously, along with its own proprietary Orders or those of its affiliated organizations or either of their associated principals, officers, directors, associates, or employees. Customer acknowledges that, from time to time, Hotspot FX may execute Orders for itself or its affiliated organizations at the same or better prices ahead of a Customer Order. The Fill rate on Market Orders can and will vary from initial Spot Rate quotes. These risks are more fully described in the Risk Disclosure Statement, which You must read and execute prior to executing your first trade.

My opinion is since Hotspot Fx itself trading in its own platform and then it should have the order book which records all orders of its clients, there is no big difference between such kind of ECN and other Non-ECN Retail Dealers.

Welcome any explanations or comments.

 

[Baruch]

Hi

does is anone aware of any brokers that offer a 2 pip spread on major pairs?

I know that some direct access ECN type brokers such as hotspotfx and espeed offer a spread that is less than 3.

It seems that http://www.odlsecurities.com and http://www.igmarkets.com may offer 2 pip spreads on major pairs. Are these companies retail spot forex brokers?

Are there any other retail forex brokers that offer a 2 pip spread?


Many thanks

jtrader.

Global Trader (Etrade) offer 2 pips on eur/usd.

 

[nbo2]

I don't know how many doing FX have also had experience of stocks. directly into stocks, not playing the edges via spreadbets/cfd's or whatever.

Trading direct access you will get variable spreads which are dictated by the best bid and best ask available. You will get slippage on stops and stop entries, because in the order queueing system, the electronic exchanges execute the orders in the order submitted first come first served. If you are entering on a stop limit (usually synthetic via your brokers desk) the stop limit might trigger to get you in, but you may not necessarily get filled at all because a fast moving market may not come back to your maximum limit even. If you are entering on a limit order - the price may come to your price but you get no fill, because someone didn't buy/sell with you because you were not at the head of the queue.

What does all this have to do with FX?

Well many of the questions/points about slippage and spreads are a fact of life in the underlying direct-access trading world. Its only the bucket shops that do things like Guaranteed stops (except when they decide not to guarantee them), Fixed spreads, and so forth.

I use Oanda. I have no difficulty with spreads opening wide in really volatile times. I rarely get any slippage, even though that may be a possibility. I can place my order at ANY price I desire at any time I desire day or night 7 days a week. I can move my stops/limits at any time should I desire.

I accept that if the price gaps over a stop-limit entry, I may not get filled if the gap is beyond the limits I have set, and the order would be cancelled. Also that my stop may not fill at exactly the price I set it (the worst I have seen was 3 pips out - it will fill at the nearest available price.).

But the upside is, I've put through fair-sized trades routinely without hick-up on mostly keen spreads, which have worked in my favour most of the time. I've been able to get my orders filled without hassle (I always allow a little space for slippage and factor it into my strategies in any case) and have found it a darn sight easier than trading direct-access stocks retail or trying to negotiate the tricks most of the bucket shops employ!!!

 

[Trdr]

http://fxtrade.oanda.com/resources/spreadstats/spreadsminmax.shtml